lululemon athletica (NASDAQ: LULU) has just come out and filed to sell up to more than 20.9 million shares in a secondary offering.  The company says that it may issue these upon the redemption, retraction or purchase of an equivalent number of the exchangeable shares of Lulu Canadian Holding, Inc. (an indirect wholly-owned subsidiary), or upon the liquidation, dissolution or winding up of Lulu Canada.

These exchangeable shares were issued to Canadian stockholders inconnection with its July 2007 reorganization, which it says wasdisclosed.  None of the proceeds will benefit the company in this sale.

While these are likely to come to market, it doesn’t look like any underwriters were selected in the filing.

We would note that this had more than 16.5 million shares listed asbeing in the short interest, which is also listed as being about 70.8%of the public float if that data is accurate.  These shares are not inaddition to the fully diluted shares so it should not change the fullydiluted share count.

lulu shares closed down almost 4% at $22.20 today in normal trading.  Shares are down marginally after the close but it looks like much of this had been disclosed if you have followed it since the IPO.  Its 52-week trading range is $21.25 to $60.70.

Jon C. Ogg
July 31, 2008

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